The Federal Board of Revenue (FBR) has exempted customs duty on import of equipment (not manufactured locally) by a Chinese contractor for Lahore Orange Line Metro Train Project. The FBR has issued an SRO here on Wednesday. According to the notification, the federal government vide its notification number 40(I)/2017, dated 25th January 2017 has allowed exemption of whole of customs duty on import of equipment, if not manufactured locally, by M/S CR-NORINCO (Chinese Contractor) to be furnished and installed in Lahore Orange Line Metro Train Project.
This is subject to the condition that the equipment imported under this notification shall only be used in the aforesaid project. Secondly, the importer will furnish an indemnity bond in the prescribed manner and format as set out in Annex-A of the notification, at the time of import to the extent of customs duties exempted under this notification on consignment to consignment basis.
Thirdly, the Punjab Mass Transit Authority, established under the Punjab Mass Transit Authority Act, 2015, hereinafter referred as the Regulatory Authority, shall certify in the prescribed manner and format that the imported equipment is bona fide requirement of the project under the contract signed between the Regulatory Authority and the said contractor.
Fourthly, in the event a dispute arises whether any item is entitled to exemption under this notification, the item shall be immediately released by the customs department against a corporate guarantee, valid for a period of six months, submitted by the importer. A certificate from the Regulatory Authority, duly verified by the transport and communication section of the Ministry of Planning, Development and Reform, that the item is covered under this notification, shall be given due consideration by the customs department towards finally resolving the dispute. Disputes regarding the local manufacturing shall only be resolved through the Engineering Development Board of the federal government.
Fifthly, for the clearance of imported equipment through Pakistan Customs Computerised System, the authorised officer of the Regulatory Authority shall furnish all relevant information online against a specific user ID and password obtained under section 1550 of the Customs Act, 1969. In collectorates or customs stations where the Pakistan Customs Computerised System is not operational, the director reforms and automation or any other person authorised by the collector in this behalf shall enter the requisite information in Pakistan Customs Computerised System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerised shall be made on weekly basis.
Sixthly, the equipment, imported under this notification, shall not be re-exported, sold or otherwise disposed of without prior approval of the Federal Board of Revenue (FBR). In case goods are sold or otherwise disposed of with prior approval of FBR, the same shall be subject to payment of duties as may be prescribed by the FBR.
Seventh, in case the equipment imported under this notification is sold or otherwise disposed of without prior approval of the FBR in terms of condition (f), the same shall be subject to payment of statutory rates of customs duties as were applicable at the time of import.
The equipment imported under this notification may be surrendered at any time to the collector of customs having jurisdiction, without payment of any customs duties for further disposal as may be prescribed by the FBR, the FBR said.
The FBR added that the indemnity bond submitted in terms of condition (b) by the importer shall be discharged on the fulfilment of conditions and violation of any of the above conditions shall render the goods liable to payment of statutory rate of customs duties leviable on the date of clearance of goods in addition to any other penal action under relevant provisions of the law.
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